Inflation is the outcome of several interacting forces. These include underlying structural trends, demography and globalisation, and the macro-economic balance between savings and investment, as well as purely monetary phenomena. Intuitively, the balance between workers, who normally produce more than they consume, and dependents (old and young), who do the opposite, matters. A more complex argument depends on how different sectors of the economy (households, corporates and the government) change their savings and investment behaviour in response to ageing.
